Published on 25 Apr 2013 • USA (National/Federal) |
"(a) In addition to the Initial Capital Contributions of the Members, the Members shall make additional Capital Contributions in cash, in proportion to their respective Membership Interests, as determined by the Managing Member from time to time to be reasonably necessary to pay any operating, capital or other expenses relating to the Business (such additional Capital Contributions, the "Additional Capital Contributions"), provided, that such Additional Capital Contributions shall not exceed corresponding amounts expressly provided for in the Budget, as it may be amended from time to time. Upon the Managing Member making such determination for Additional Capital Contributions, the Managing Member shall deliver to the Non-Managing Member a written notice of the Company's need for Additional Capital Contributions, which notice shall specify in reasonable detail (i) the purpose for such Additional Capital Contributions, (ii) the aggregate amount of such Additional Capital Contributions, (iii) each Member's share of such aggregate amount of Additional Capital Contributions based upon each such Member's Membership Interest, and (iv) the date (which date shall not be less than [NUMBER] Business Days from the date that such notice is given) on which such Additional Capital Contributions shall be required to be made by the Members."
"If the Additional Capital Contribution shall not be in cash, but shall be in the form of assets, the amount of such Additional Capital Contribution shall be the Book Value of such assets."
If the members also want to give the managing member some discretion to request amounts exceeding the budget to cover unforeseen costs and expenses that are still necessary for the operation of the LLC, they should consider adding the following sentence after the first sentence to allow the managing member to request up to a certain amount above the budget:"Notwithstanding the foregoing, the Managing Member shall be authorized to call for Additional Capital Contributions in an amount of up to [PERCENTAGE]% in excess of the corresponding amounts set forth in the Budget, which amounts shall also constitute Additional Capital Contributions."
Alternatively, instead of giving the managing member the discretion to make capital calls within the limits set by the budget, the members may agree to set the schedule of additional capital contributions in the budget and not provide the managing member with any discretion to decide when and how much money is needed. In that case, Section 3.02(a) should be replaced with the following:"In addition to the Initial Capital Contributions of the Members, the Members shall make additional Capital Contributions in cash, in proportion to their respective Membership Interests, in such amounts and at such times as set forth in the Budget, as it may be amended from time to time in accordance with Section 7.06 (such additional Capital Contributions, the "Additional Capital Contributions")."